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Accounts for your members

1. Who is responsible for preparing accounts?

The directors of every company must prepare accounts for each financial year. These are called individual accounts. A parent company must also prepare group accounts (but for parent companies defined as small this is optional – see chapter 6).

2. What does a set of accounts include?

Generally, accounts must include:

a profit and loss account (or income and expenditure account if the company is not trading for profit);
a balance sheet signed by a director;
notes to the accounts; and
group accounts (if appropriate).
And accounts must generally be accompanied by

a directors' report (with a business review if the company does not qualify as small);
an auditors'report (unless the company is exempt from audit);

3. What period must the accounts cover?

A company's first accounts cover the period starting on the date of incorporation, not the first day of trading. They end on the accounting reference date or up to 7 days either side of that date.

Subsequent accounts start on the day after the previous accounts ended and finish on the accounting reference date or up to 7 days either side of it. For further information on changing your accounting reference date see chapter 2.


For example, if a company is incorporated on the 6th April 2009 the accounts must cover the entire period of 6th April 2009 – 30 April 2010. Subsequent periods will start on 1 May each year and end on 30 April the following year.

4. What if a company cannot afford a professional accountant?

There is no requirement for companies to use a professional accountant to prepare their accounts. However, directors should be aware of their legal responsibilities regarding accounts and if they are uncertain about the requirements they may consider seeking professional advice.

5. Does every company have to send accounts to members etc?

Every company must send a copy of its annual accounts for each financial year to -

every member of the company;
every holder of the company's debentures; and
every person who is entitled to receive notice of general meetings.

6. Does a company have to lay its accounts before a general meeting?

A public company must lay its accounts before its members at an annual general meeting. There is no longer a statutory requirement for private companies to lay their accounts before members at a general meeting. If a private company’s articles currently specify that the company must lay accounts before members at a general meeting, they may pass a special resolution to remove that provision.

7. Can a company pass a resolution to use a website as way of showing members the accounts?

Yes. A company may pass a resolution or make provision in its articles to the effect that the company may send or supply documents, including accounts, to members by website. Members do not have to agree to receive communications in this way and have the right to request a paper copy.

8. Who can approve and sign accounts?

The company's board of directors must approve the accounts before they send them to members etc.

A director must sign the balance sheet on behalf of the board and state his/her name, with any statements about accounting or filing exemptions appearing above the director's signature;
A director or the company secretary must sign the directors' report on behalf of the board and state his/her name. Any statement about its being prepared under the small companies regime must appear above the signature; and
If the company has to attach an auditor’s report to the accounts, the report must state the auditor’s name.
Where the auditor is a firm the auditor’s report must state the name of the auditor and the name of the person who signed it as senior statutory auditor on behalf of the firm.

For more details, please see chapter 11 – Auditors